Yes, higher interest rates should depress real estate prices, but in the short term, sellers keep prices high, buyers can't afford them, so transaction volume d

Yes, higher interest rates should depress real estate prices, but in the short term, sellers keep prices high, buyers can't afford them, so transaction volume dries up. Those expensive places stay on the market for a long time. The exceptions are forced sales, due to death, divorce, unemployment or employment relocation. Even those may delay sale (e.g. bridging loans) if rates are expected to fall soon. Prices stay high, then collapse when a trickle of sales at lower prices resets expectations in a self-reinforcing downward price spiral. The overall effect depends on max holding duration of forced sales, compared to future rate expectations (related to the yield curve).